(1)Sections 104, 105 and [F2106A] shall not apply to any shares in a venture capital trust which are eligible for relief under section 151A(1).
(2)Subject to the following provisions of this section, where—
(a)an individual holds any ordinary shares in a venture capital trust,
(b)some of those shares fall within one of the paragraphs of subsection (3) below, and
(c)others of those shares fall within at least one other of those paragraphs,
then, if there is within the meaning of section 126 a reorganisation affecting those shares, section 127 shall apply separately in relation to the shares (if any) falling within each of the paragraphs of that subsection (so that shares of each kind are treated as a separate holding of original shares and identified with a separate new holding).
(3)The kinds of shares referred to in subsection (2) above are—
(a)any shares in a venture capital trust which are eligible for relief under section 151A(1) and by reference to which any person has been given or is entitled to claim relief under Part I of Schedule 15B to the Taxes Act;
(b)any shares in a venture capital trust which are eligible for relief under section 151A(1) but by reference to which no person has been given, or is entitled to claim, any relief under that Part of that Schedule;
(c)any shares in a venture capital trust by reference to which any person has been given, or is entitled to claim, any relief under that Part of that Schedule but which are not shares that are eligible for relief under section 151A(1); and
(d)any shares in a venture capital trust that do not fall within any of paragraphs (a) to (c) above.
(4)Where—
(a)an individual holds ordinary shares in a company (“the existing holding”),
(b)there is, by virtue of any such allotment for payment as is mentioned in section 126(2)(a), a reorganisation affecting the existing holding, and
(c)immediately following the reorganisation, the shares or the allotted holding are shares falling within any of paragraphs (a) to (c) of subsection (3) above,
sections 127 to 130 shall not apply in relation to the existing holding.
(5)Sections 135 and 136 shall not apply where—
(a)the exchanged holding consists of shares falling within paragraph (a) or (b) of subsection (3) above; and
(b)that for which the exchanged holding is or is treated as exchanged does not consist of ordinary shares in a venture capital trust.
(6)Where—
(a)the approval of any company as a venture capital trust is withdrawn, and
(b)the withdrawal of the approval is not one to which section 842AA(8) of the Taxes Act applies,
any person who at the time when the withdrawal takes effect is holding shares in that company which (apart from the withdrawal) would be eligible for relief under section 151A(1) shall be deemed for the purposes of this Act, at that time, to have disposed of and immediately re-acquired those shares for a consideration equal to their market value at that time.
(7)The disposal that is deemed to take place by virtue of subsection (6) above shall be deemed for the purposes of section 151A to take place while the company is still a venture capital trust; but, for the purpose of applying sections 104, 105 and [F3106A] to the shares that are deemed to be re-acquired, it shall be assumed that the re-acquisition for which that subsection provides takes place immediately after the company ceases to be such a trust.
(8)For the purposes of this section—
(a)shares are eligible for relief under section 151A(1) at any time when they are held by an individual whose disposal of the shares at that time would (on the assumption, where it is not the case, that the individual attained the age of eighteen years before that time) be a disposal to which section 151A(1) would apply; and
(b)shares shall not, in relation to any time, be treated as shares by reference to which relief has been given under Part I of Schedule 15B to the Taxes Act if that time falls after—
(i)any relief given by reference to those shares has been reduced or withdrawn,
(ii)any chargeable event (within the meaning of Schedule 5C) has occurred in relation to those shares, or
(iii)the death of a person who held those shares immediately before his death;
and
(c)the references, in relation to sections 135 and 136, to the exchanged holding is a reference to the shares in company B or, as the case may be, to the shares or debentures in respect of which shares or debentures are issued under the arrangement in question.]
Textual Amendments
F1Ss. 151A, 151B inserted (with effect in accordance with s. 72(8) of the amending Act) by Finance Act 1995 (c. 4), s. 72(3)
F2Word in s. 151B(1) substituted (with effect in accordance with s. 124(7) of the amending Act) by Finance Act 1998 (c. 36), s. 124(6)
F3Word in s. 151B(7) substituted (with effect in accordance with s. 124(7) of the amending Act) by Finance Act 1998 (c. 36), s. 124(6)